Miller Magazine Issue: 151 July 2022

56 MILLER / JULY 2022 NEWS “The equilibrium prices for wheat could be 19% above pre-conflict levels if Ukraine fully loses its capacity to export and 34% higher if in addition Russian exports are 50% of normal amounts,” the Food and Agricul- ture Organization (FAO) and the Organisation for Economic Cooperation and Development (OECD) said. The global agrifood sector faces fundamental challenges over the coming decade, particularly the need to feed an ev- er-increasing population in a sustainable manner, the impacts of the climate crisis and the economic consequences and dis- ruptions to food supply linked to the war in Ukraine, according to a report released by the Food and Agriculture Organization of the United Nations (FAO) and the Organisation for Economic Co-operation and Development (OECD). The OECD-FAO Agricultural Outlook 2022-2031 focuses on assessing the medium-term prospects for agricultural commodi- ty markets. The findings of the report underscore the crucial role of additional public spending and private investment in produc- tion, information technology and infrastructure as well as human capital to raise agricultural productivity. Prices of agricultural products have been driven upward by a host of factors, including the recovery in demand following the outbreak of the COVID-19 pandemic and the resulting supply and trade disruptions, poor weather in key suppliers, and rising production and transportation costs, which have been further exacerbated recently by uncertainties regarding agricultural ex- ports from Ukraine and Russia, both key suppliers of cereals. Russia's role in fertilizer markets has also compounded already existing concerns about fertilizer prices and near-term produc- tivity. The report provides a short-term assessment of how the war may affect both global agricultural markets and food security. It underlines major risks to key commodity markets: equilibri- um prices for wheat could be 19% above pre-conflict levels if Ukraine fully loses its capacity to export and 34% higher if in addition Russian exports are 50% of normal amounts. A scenario simulating a severe export shortfall from Ukraine and Russia in 2022/23 and 2023/24, and assuming no global production response, suggests a further increase in the number of chronically undernourished people in the world following the COVID-19 pandemic. "Without peace in Ukraine, food security challenges facing the world will continue to worsen, especially for the world’s poorest,” OECD Secretary-General Mathias Cormann said. "An immediate end of the war would be the best outcome for peo- ple in both Russia and Ukraine and for the many households Wheat prices could be 34% above pre-Ukraine war levels, FAO and OECD warn